India's manufacturing sector starts 2025 on strong footing as Manufacturing PMI hits 57.7

India's manufacturing sector activity witnessed significant growth in January, aided by a rise in new orders and the steepest upturn in exports. Goods producers welcomed another substantial increase in new orders, which they attributed to better domestic demand and a pick-up in international sales. Total new business expanded at the fastest rate in six months.

According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) surged to 57.7 in January, up from 56.4 in December. January data also showed a pick-up in buying level growth and record job creation. Cost pressures retreated to their weakest in 11 months, but selling prices rose solidly amid buoyant demand.

"India's final manufacturing PMI marked a six-month high in January. Domestic and export demand were both strong, supporting new orders growth," said Pranjul Bhandari, Chief India Economist at HSBC.

According to the report, companies became more optimistic about output prospects, with nearly 32% of firms forecasting growth and just 1% expecting a reduction. The buoyant underlying demand, better customer relations, favourable economic conditions, and marketing efforts all bode well for growth prospects. Besides, firms were successful in their efforts to lift inventories as suppliers were able to deliver materials in a timely manner.